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Common mistake lookup

Search quantitative research mistakes

Use this lookup to map recurring research, data, and risk-review mistakes to concrete diagnostics. Treat each result as a starting point for improving assumptions, evidence quality, and review discipline.

Search and filters

ResetResearchDataRisk

Results

2 matching entries

Review methods →
RiskSafety

Transaction costs and frictions are ignored

Typical symptoms

  • High-turnover results are presented without friction
  • Small edge disappears under conservative assumptions
  • Liquidity constraints are absent

Likely causes

  • Headline returns were prioritized over implementability
  • Turnover was not measured
  • Spread and market impact assumptions were omitted

Checks

  • Calculate turnover
  • Apply conservative cost scenarios
  • Compare performance before and after friction

Resolution path

  • Report base, conservative, and severe friction cases
  • Reject fragile results that only work without costs
  • Add liquidity and capacity notes

Related terms: slippage, turnover, market impact, capacity

RiskRuntime

Risk is summarized by one flattering metric

Typical symptoms

  • Only one performance or risk statistic is shown
  • Drawdown path is missing
  • Bad scenarios are explained away without evidence

Likely causes

  • The review selected the metric that made the result look best
  • Path-dependent losses were not inspected
  • Stress cases were skipped

Checks

  • Inspect drawdown, volatility, tail loss, and time under water
  • Compare against a benchmark
  • Review worst-month and worst-period behavior

Resolution path

  • Use a balanced scorecard
  • Add drawdown and stress sections to every report
  • Make the decision label reflect downside evidence

Related terms: drawdown, tail risk, time under water, stress test

Educational boundary

This lookup is for research troubleshooting and reproducibility. It is not financial, investment, trading, tax, or legal advice. Prefer conservative assumptions and independent review when evaluating any analytical result.

InQuantWeTrust publishes educational content for quantitative research and analytical methods. It does not provide personalized advice, trade recommendations, managed services, or guaranteed outcomes.